A life insurance annuity is a great way to build up your investments for the future for both you and your family, but how do you get one? In this article, we will discuss how!
How to Get a Life Insurance Annuity
The first thing you need is a large sum of money that you wish to put into the annuity. You can put money to grow in value, or you can have it be distributed as is over time. That’s the basics. However, there are other factors to consider when choosing a plan:
- How much time do you want to wait?
- How much are you looking to invest?
- What are you saving for? You, your family, or something else?
- If you are looking for an instant payout, do you need it now or later?
These are just a few questions to consider. If you need more help
What Kinds of Annuities Are There?
There are two main types of annuities: Deferred and Immediate.
Deferred Annuities yield long-term savings. These are perfect for retirement planning or building a financial cushion. Money is grown tax-deferred, meaning taxes are not owed on earnings nor contributions if part of an IRA until withdrawals start. Immediate Annuities begin paying, well, immediately. These are great if you earn a large amount of income, such as an inheritance or selling a property, and want to convert it into a steady stream of income. This scenario can ensure money isn’t overspent or degraded too quickly.
Both offer different investment options:
- Fixed Annuities – This is considered the safest option, but returns are typically modest. Fixed annuities deliver a predictable return and a guaranteed minimum interest rate.
- Indexed Annuities – These come with relatively low to moderate risk. These plans tie returns to a market index with no guaranteed minimum. Usually, these products offer better returns than fixed annuities.
- Variable Annuities – These are similar to mutual funds. They come with the most risk, yet have the highest earning potential. There is no guarantee of profits.
Who Can Help?
Annuities can be purchased via an insurance company, insurance agent, brokerage firm, mutual fund company, or bank. If you want to learn more, contact us today! We’d be happy to help!
Did you enjoy reading this article? Check out this one on our sister site: Key Features to Look for in a Health Insurance Family Plan.
Life Insurance Questions?
We hope that this information on life insurance annuities was useful to you.
If you’d like to learn how we can help you plan your retirement, call Empower Brokerage at (888) 539-1633 to speak to one of our Life and Annuity experts or leave a comment down below.
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